LG Philips raises LCD stakes

New 5G Plant

LG Philips, the liquid crystal display manufacturing joint venture of Royal Philips Electronics NV and LG Electronics, moved to consolidate its market-leading position on Friday with the opening a major new fab in Kumi, South Korea.

The thin-film-transistor LCD plant is claimed to be the first "fifth-generation" TFT-LCD fab, and is designed to revolutionize productivity levels in application of TFT_LCD technology to displays of 15" and greater.

The opening of the P4 plant finished off a busy week for Philips' publicity department, after the Eindhoven, Netherlands-based company had used the Symposium on Information Display in Boston as the platform for a raft of product and technology announcements. Those announcements included a TFT-LCD manufacturing breakthrough Philips said would produce the world's thinnest displays for phones and PDAs.

The opening of the P4 plant is likely to be the most immediately significant announcement for Philips and for the display industry at large. By the second half of this year, Philips claims P4 will reach full capacity, producing 60,000 LCD sheets per month. This is a new benchmark for LCD production that competitors will have to scramble to emulate.

Not only is P4 more productive than conventional LCD plants, but also it has been designed to mass produce bigger displays. It is the first LCD fab to use 1000mm x 1200mm glass substrates, and will allow Philips and LG to quickly push their technology into the television sector, as well as using P4 to build bigger flat-screen monitors for computers.

According to DisplaySearch, the Austin, Texas market research company, LG Philips is already the single largest LCD manufacturer, having produced 15.2% of the worldwide glass area input last year. P4 has the potential to dramatically increase this input, and will out the company in pole position to claim the lion's share of a flat panel display market DisplaySearch estimates is achieving compound annual growth of 21.1%, and which will be worth $57bn by 2006.

Although P4's impact will be greatest in the TV market, where bigger flat panel screens are gaining market traction quickly, it will also have significance for the computer monitor market, which is being increasingly penetrated by flat panel displays. Such has the demand been for flat panel monitors in the last 12 months that prices have risen steadily throughout the year.

It remains to be seen whether P4's impressive capabilities will allow it to narrow the market gap between supply and demand sufficiently to stabilize or reduce prices. What is certain is that will allow LG.Philips to quickly grow revenue.